Old ATO building in Wollongong CBD

In what is possibly the largest office leasing deal ever for the city of Wollongong, NSW State Emergency Services (SES) have just committed to a long term lease of close to 5,700m2. The stand alone building, locally referred to as the ex Tax Office, will be substantially upgraded and refurbished to ‘A’ grade equivalent standard.

The deal is the culmination of an exhaustive leasing tender process by GPNSW, noting the SES’ unique requirements, and represents a large increase on their current footprint within the city. SES’ headquarters have been in Wollongong for over 25 years, growing steadily to now employ almost 300 people. The deal allows for full complimentary facilities for the disaster recovery agency, with demand on their services expected to grow further

The deal was brokered by Michael Croghan, Director of Commercial Leasing at MMJ Wollongong, on behalf of well-known local investors Steve and Nick Grozdanov (Quality Green Commercial Pty Ltd). This transaction is significant for numerous reasons, not simply the quantum of space and expansion of a government agency in a regional city, but also the impact on the market place. The most recent PCA vacancy for Wollongong was 13.7% (Jan 2015). The 5,700m2 deal alone reflects a take-up of almost 3.5% of overall vacancy.

Deal: MMJ commercial leasing director Michael Croghan and Steve Grozdanov, of Quality Green Group, discuss SES leasing the fomer ATO building. Picture:Greg Ellis.
Deal: MMJ commercial leasing director Michael Croghan and Steve Grozdanov, of Quality Green Group, discuss SES leasing the fomer ATO building. Picture:Greg Ellis.

Despite media fascination with potential ongoing cutbacks at Bluescope’s Port Kembla Steelworks, there has been plenty of positive momentum in the region in recent times, with a hive of development activity:

– GPTs new West Keira Shopping Centre

– Completion of Crown Street Mall

– Wollongong Private Hospital development nearing completion

– Substantial inner city high rise residential developments

– Continued robust expansion of the University of Wollongong’s Innovation Campus including a ‘Start up’ incubator

– Continued growth of the University

– Shell Cove Marina

Interestingly, over the last 2 years there have been more than 30 new cafes, and small boutique bars open in the city centre, just another example of how the tone of the city and region has been continuing to change for the better.

Likewise, Mr Croghan reports a very strong office leasing market, “aside from the SES deal, the last 12-18 months have been very active and far better than many pundits have predicted. I was queried repeatedly at a recent PCA talk I gave as to MMJ’s positive outlook and am very pleased to boast a whole host of leasing deals, particularly ‘A’ grade. There has been an a clear trend of increasing rental rates, low incentives, and ‘tenants flight to quality’.

Wollongong provides a classic case of perception versus reality. Well informed and proper insight from the ‘coal face’ has been the key to great opportunities being realised for property investors. In a national commercial property market that many experts are saying is over heated, the regional market of Wollongong which is arguably ‘below the radar’ provides a strong case based on value for money and return for smart property investors.”